Ontario has been the largest issuer of fines over the last five years, a new insurance report on environmental fines across Canada has found.
The province issued environmental fines totaling $22 million over 2015 – 2019, largely focusing on air quality and emissions contraventions, according to insurance company Berkley Canada’s Environmental Fines and Penalties: 2019 Update Report.
The dollar amount of Ontario’s fines had been growing consistently. Fines issued between 1991 to 2009 averaged $816,667 per year. But as of 2017, fine levels began to start dropping, with 2019 yielding the lowest level of fine activity in six years.
From 2012 until 2015, 45 projects in Ontario received nearly $850,000 from the Ontario Community Environment Fund, which uses money collected from environmental penalties to support environmental improvement projects in watersheds.
Additionally, in 2019 the Ontario government gave environmental officers wider scope to issue fines for violations such as emitting excess sulphur dioxide, a toxic compound typically released by oil refineries. The maximum fine doubled to $200,000.
Second to Ontario in issued fine totals over the last five years is British Columbia, which issued $15 million in fines over this period largely focusing on water pollution.
“Historically, fines and penalties were used sparingly in Canada when compared to Europe or the United States of America,” states the Berkley Canada report.
Between 1991 and 2009, the aggregate average value of fines issued across Canada each year was $1.4 million. Between 2015 and 2019, the majority of environmental fines levied across Canada focused on air and water pollution violations.
The largest fine in Canadian history for an environmental offence remains the $196.5-million fine levied against Volkswagen in early 2020 for equipping vehicles with the ability to cheat emissions tests. The penalty is 26 times larger than the previous record $7.5-million fine for environmental infractions at the Bloom Lake iron ore mine in Quebec in 2014.
The Berkley Canada report is framed around a perspective that environmental insurance could be a way to protect against vulnerability to fines and penalties.
“While it may not be surprising that an insurance company would exclude loss arising out of a deliberately caused pollution event, cover for fines and penalties that result from accidental (fortuitous) events can be insured,” states the report.